What is a price taker? Discuss the assumptions used to obtain the perfectly competitive model
What will be an ideal response?
A price taker, or perfectly competitive firm, is a firm that must take the market price of its product as given because it cannot influence the market price. The model of perfect competition has four assumptions. There is a large number of buyers and sellers, and no one has any influence on the market price. The product is homogeneous, so the output of one firm is a perfect substitute for the output of another firm. Buyers and sellers have all the information they require to determine the lowest price and best production technique. Finally, all firms can easily enter or leave the industry.
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To what do economists attribute the rapid growth of labor productivity in the United States relative to other countries?
A) the flexibility of U.S. labor markets and the efficiency of the U.S. financial system B) the high level of unemployment benefits the United States pays relative to other countries like Canada C) the strict government rules in the United States that regulate a firm's ability to hire and fire workers D) the low rate of job mobility in the United States
A short-run production function was estimated asQ = ?0.002L3 + 0.16L2What is average product when it is at its maximum level?
A. 8.75 B. 6.92 C. 3.20 D. 6.00 E. 9.40